LUXEMBOURG/ATHENS, May 6 (Reuters) - Top finance officials
of the euro zone's biggest economies met to discuss Greece's
debt crisis on Friday and Athens denied a media report that it
was considering whether to leave the bloc.

Jean-Claude Juncker, head of the group of euro zone finance
ministers, said the meeting in Luxembourg was attended by
ministers from Germany, France, Italy and Spain. He said there
was a broad discussion of Greece and other international
economic issues.

Juncker denied a report in Germany's Spiegel Online magazine
that the talks were held to discuss the possibility, raised by
Athens, of Greece withdrawing from the 17-member euro zone, as
well as the idea of restructuring Greece's 327 billion euro
($470 billion) sovereign debt.

"We have not been discussing the exit of Greece from the
euro area. This is a stupid idea. It is in no way -- it is an
avenue we would never take," he told reporters.

"We don't want to have the euro area exploding without
reason. We were excluding the restructuring option, which is
discussed heavily in certain quarters of the financial
markets..."

But Juncker said a meeting of all euro zone finance
ministers on May 16 would discuss whether Greece needed a
further economic plan, beyond the 110 billion euro bailout which
it obtained from the European Union and the International
Monetary Fund in May last year. He did not elaborate.

Greek Finance Minister George Papaconstantinou attended the
Luxembourg talks, his finance ministry said. It added that
Greece remained committed to repairing its finances and
returning to economic growth.

"The minister was invited to exchange views (on issues
including) economic developments in Greece," the ministry said.
"It is clear that during this meeting it was never discussed or
posed as an issue whether Greece would remain in the euro zone."

The Luxembourg talks were also attended by European Central
Bank President Jean-Claude Trichet and Olli Rehn, the European
commissioner for economic and monetary affairs, Juncker said.

EURO FALL

Earlier in the day, the euro fell nearly 1 percent against
the dollar and the cost of insuring Greek debt against default
was quoted at a record high in response to the Spiegel report.

"The government has raised the possibility of leaving the
euro zone and reintroducing its own currency," Spiegel said
without citing its sources.

Despite its international bailout Greece, which joined the
euro zone in 2001, has been unable to cut its budget deficit as
fast as planned amid a deep recession. It has been raising taxes
and slashing spending but is still plagued by tax evasion,
corruption and the economy's lack of competitiveness.

Financial markets have been speculating for months that
Athens will eventually have to restructure its debt and with the
political will for more austerity starting to flag, some Greek
politicians have been suggesting a "soft" restructuring which
might involve lengthening maturities on the country's bonds.

An exit from the euro zone could help the economy in the
long term; Greece would be able to cut interest rates and having
its own, weak currency would boost exports and tourism.

But there is no legal procedure for leaving the zone, and
the risks and immediate costs of the process -- Greece could
face bank runs, and banks around the region could be damaged --
mean the government is likely to fight hard to avoid that
option.

Although taxpayers in rich euro zone states such as Germany
are becoming increasingly reluctant to fund weak euro zone
states, their governments prize the currency union as one of
Europe's great political achievements. The EU is currently
negotiating a bailout with Portugal, the third state it is
rescuing after Greece and Ireland.

A German government official told Reuters on Friday that a
Greek exit from the euro zone "is not planned and was not
planned", while a spokesman for the Austrian finance ministry
said a breakup of the bloc would be "absolutely unthinkable".

Spiegel quoted from what it said was an internal German
finance ministry paper that German Finance Minister Wolfgang
Schaeuble was taking with him to Luxembourg, which warned that a
Greek exit "would lead to a significant depreciation of the
domestic currency versus the euro" and increase Greece's debt
levels to 200 percent of gross domestic product. Its debt is
officially projected to climb to 153 percent of GDP this year.
(Additional reporting by Jan Strupczewski and Luke Baker in
Brussels, Andreas Rinke, Matthias Sobolewski and Noah Barkin in
Berlin, Lefteris Papadimas in Athens and euro zone bureaux;
Writing by Andrew Torchia; editing by Tim Pearce)